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Mullen to the Rescue

Cole Capital (Cole) recently announced the hiring of Terrence J. Mullen, a financial services industry veteran, as a senior advisor to the Company.

Tasked with enhancing Cole’s distribution efforts and strengthening relationships with broker-dealers, Mullen’s role begins immediately as the sponsor and distributor of non-traded real estate investment trusts seeks to save itself from the accounting scandal that’s plagued its parent American Realty Capital Properties (ARCP).

Cole Capital, the private capital management business of ARCP, became part of Nick Schorsch’s empire after Cole Real Estate Investments agreed to be acquired by ARCP in late 2013.

In early October 2014, ARCP agreed to sell Cole to RCS Capital Corporation (RCAP) an unaffiliated entity that Schorsch also maintains significant ownership of.

By the end of that month, ARCP announced it had discovered accounting irregularities in its quarterly reports, which eventually became known to have been intentionally covered up.

In early November after days of watching its stock price plummet, RCAP withdrew its offer to purchase Cole, which ARCP initially vowed to fight.

RCAP and ARCP eventually agreed to terminate the transaction, leaving Cole and its employees in limbo.

Be sure to read Oppenheimer Values Cole at Almost Half of the $700 Million RCAP Agreed to Pay

Independent broker-dealers (IBDs) that distribute Cole’s products have suspended selling agreements of the company’s non-traded REITs despite the company and its programs having separate accounting departments from those of ARCP.

Also, according to a lawsuit filed in New York, Lisa McAlister, former Chief Accounting Officer of ARCP, has alleged that Nick Schorsch ordered the cover-up despite her many attempts to have the accounting irregularities fixed.

Enter Mullen.

During his 25 years in the field, Mullen has led all aspects of distribution efforts for firms like Sun Life Financial, AIG SunAmerica, and Lincoln Financial Distributors working with IBDs.

In early October, Cole’s distribution team was 77 members strong. Mullen will work quickly to restore trust and regain selling agreements with IBDs to keep those folks employed, raising capital for the company’s non-traded REITs.

“Terry is a tremendous addition to the Cole Capital team. He is a seasoned professional and his experience managing broker-dealers with large sales forces will provide us with an enhanced perspective of our broker-dealer partners and allow us to better understand their specific needs. We are pleased to have someone of his caliber on board as we work collectively to strengthen our sales, marketing and broker-dealer initiatives,” said Michael Ezzell, Chief Executive Officer and President of Cole Capital.

“I am excited to join Cole Capital, a business with a strong brand and significant potential for long-term growth,” said Mr. Mullen. “Cole is already a well-known name in the industry, recognized as a leading sponsor of non-traded REITs, and I look forward to working alongside its team of highly respected, experienced professionals to further that legacy.”